Question 1

In which of the following stages of the new product development process is a development budget established and some preliminary marketing and technical research undertaken?

Accepted Answer

The stage in which a development budget is established and preliminary marketing and technical research is undertaken is the project planning stage of the new product development process. In this stage, the objectives of the project are determined, market and technical feasibility are examined, a preliminary marketing strategy is developed, and a development budget is established. Therefore, the best choice is B.

Question 2

_____ refers to a method used for creating and managing project teams whereby a project team can work in relative privacy away from the rest of an organization.

Accepted Answer

Skunkworks refers to a project team that is created and managed separately from the rest of an organization, often in a secluded environment. This approach allows the team to focus their efforts on the project at hand and work without distractions or interruptions. The concept was developed by Lockheed Martin in the 1940s and has since been used by many organizations, including NASA and Google.

Question 3

Which of the following best describes a strategic alliance?

Accepted Answer

A strategic alliance involves a long-term partnership between two organizations, with the aim of achieving mutual strategic goals. It could involve sharing resources, knowledge, and expertise to achieve a competitive advantage. It is different from internal collaborations within an organization, such as cross-functional teams or task forces, as it involves external partners. It is also distinct from external experts who may be contracted by an organization on a short-term basis to provide specialized skills or knowledge.

Question 4

_____ risk is the risk that a new product will not be developed within the desired time and budget.

Accepted Answer

Internal risk refers to the potential for a project or initiative within an organization, such as the development of a new product, to fail to meet its objectives in terms of time and budget. This type of risk is concerned with the internal processes and resources of an organization.

Question 5

_____ is a method of creating and managing project teams that involves groups in different areas of an organization working simultaneously on a project.

Accepted Answer

The rugby approach, also known as "scrum" or "agile" methodology, involves cross-functional teams working simultaneously on a project and collaborating on every stage of development. The term "rugby" comes from the idea of a scrum, or a tight-knit group working together to move the ball forward, just as a project team works towards a common goal. Skunkworks refers to small, self-contained teams working independently on a project, while idea equity and out-rotation are not relevant to this definition.

Question 6

When evaluating risks associated with a new product idea in the idea screening phase,a firm should _____ because of a lack of resources or expertise.

Accepted Answer

It is important for a firm not to discount a new product idea too hastily, even if there are risks associated with it, as further evaluation or research may reveal ways to mitigate those risks. Completely rejecting the idea may also mean missing out on potential opportunities. However, the firm should also not ignore or disregard the risks, so careful consideration and analysis should be done before moving forward with the idea.

Question 7

In the idea screening phase of a new product development process,a firm finds that it lacks the resources and expertise necessary to produce a product.Which of the following is the best course of action for the firm?

Accepted Answer

Forming joint or strategic alliances with other firms can provide the necessary resources and expertise that the firm lacks for product development. It is a common strategy used by firms to pool resources and knowledge to achieve a common goal, which in this case is to produce a new product. Option A is not a viable solution as the firm is lacking resources and cannot afford to lower prices. Option B is also not a viable solution as new product development is important for a firm's growth and competitiveness. Option C is premature and should only be considered after thorough evaluation of the product idea.

Question 8

Marked Technologies Inc.has an idea for a new airplane rudder.After extensive research,it realizes that it lacks the resources needed to develop the rudder and enters into a long-term partnership with Z-High Airlines.Z-High Airlines was on the lookout for a new rudder design to be used in its commercial passenger jets.In this scenario,the relationship between Marked Technologies and Z-High Airlines is an example of a(n)_____.

Accepted Answer

The scenario describes a strategic alliance between Marked Technologies and Z-High Airlines, as they have entered into a long-term partnership to develop a new airplane rudder. A strategic alliance is a cooperative agreement between two or more firms to pursue a specific project or to achieve a mutually beneficial goal.

Question 9

In _____ teams,members from many different departments come together to jointly establish new product development goals and priorities and to develop new product development schedules.

Accepted Answer

Cross-functional teams involve members from different departments who share their expertise and knowledge to work on a specific project or goal. In this case, they come together to establish new product development goals and priorities, and develop new product development schedules.

Question 10

A key component that contributes to the success of many companies' product development efforts relates to the emphasis placed on:

Accepted Answer

Creating cross-junctional teams early in the development process helps to ensure that different departments and perspectives are involved in the development of the product. This can lead to a more well-rounded and successful product in the end. Assigning the task exclusively to top management or a group of marketers may limit the diversity of ideas and input. Limiting the budget can also hinder the development process and limit the potential for success.

Question 11

The producers of a new television show are certain that their new show will be a success due to its gripping storyline and star-studded cast.However,they are concerned about exceeding the production budget because of shooting in exotic locations and paying a high salary to the stars.In this scenario,the cost overrun is most likely an example of a(n)_____ risk.

Accepted Answer

The cost overrun in this scenario is an example of an internal risk because it is related to the internal operations and management of the project, such as budgeting and resource allocation. External factors like market demand or competition (market risk) are not the cause of the concern here.

Question 12

In the project planning stage of the new product development process,a project proposal _____.

Accepted Answer

In the project planning stage, a project proposal is developed and presented to top management for their approval to move forward with the project. This is the point where a go or no-go decision is made based on the feasibility and potential profitability of the proposed product.

Question 13

Which of the following methods are commonly used for creating and managing project teams?

Accepted Answer

Skunkworks and rugby approach are both commonly used methods for creating and managing project teams. Skunkworks involves forming a small, dedicated team to work on a specific project with minimal supervision, while the rugby approach involves creating a cross-functional team that is empowered to make decisions and work together to achieve project goals. Idea screening, observational research, test marketing, marketing applications, idea generation, and consumer research are all techniques used in the product development process, but are not specifically related to creating and managing project teams.

Question 14

In which of the following stages of the new product development process is the new product proposal evaluated and responsibility for a project assigned to a project team?

Accepted Answer

The stage where the new product proposal is evaluated and responsibility for a project assigned to a project team is in the project planning stage. In this stage, a detailed project plan is developed, and tasks and responsibilities are assigned to the project team. Idea screening is the initial stage where ideas are evaluated to determine if they align with the company's goals and whether they should be pursued. Test marketing occurs after the product has been developed and involves launching the product in a small market to gauge its reception. Product development is the actual creation of the product after the idea has been approved.

Question 15

Joe and his team have been given a fixed budget and a time frame for the development of a new product.The team's key concern is that the development is likely to overshoot the given budget and time frame.Which of the following categories of risk is likely to be faced by Joe and his team?

Accepted Answer

Internal risks pertain to issues or challenges that arise from within the organization, such as project management, resource allocation, technology failures, and compliance issues. Given that Joe and his team are concerned about overshooting the budget and time frame, the development process is likely to be impacted by internal risks, such as poor planning, scope creeps, skills gaps, and communication breakdowns. Additionally, such risks can negatively affect the project timeline, morale, and cost, thus undermining the success of the project.

Question 16

Fred is a marketing consultant working in tandem with members from other functional areas that include engineering,production,and administrative staff.While evaluating a new product proposal,Fred and his team members from other functional areas work simultaneously toward reaching a conclusion.Which of the following methods is illustrated in this scenario?

Accepted Answer

The scenario describes the Rugby approach, where a team works together in a close, overlapping manner, similar to how players in a rugby match pass the ball back and forth. This approach contrasts with sequential methods, emphasizing collaboration and simultaneous contributions from various functional areas.

Question 17

Jumpstart Inc. ,an automobile manufacturer,are better-known as the pioneers in the production of battery-operated cars.These cars were a huge success in the initial years of their launch,and Jumpstart manufactured them in huge volumes.However,over a period of time,consumer needs evolved and consumers sought more sophisticated technology-driven cars,leading to a considerable dip in the sales of these cars.This scenario illustrates the _____ risk that was not considered during the idea screening phase.

Accepted Answer

The scenario highlights the market risk that was overlooked during the idea screening phase. Jumpstart Inc. failed to anticipate the changing demands of the consumers and did not modify their product offerings accordingly, leading to a drop in sales. This can be considered a market risk as it arises due to external factors such as changes in consumer preferences, competition, etc.

Question 18

Anchor Investments Inc. ,an investment bank,acts as a financial advisory body to many independent asset owners.The bank acquires a high-stakes project that requires the exclusive involvement of senior project managers.They therefore work in relative privacy away from the rest of the organization.In this scenario,Anchor Investments is most likely using the _____ approach.

Accepted Answer

The scenario mentioned in the question indicates that Anchor Investments Inc. is using the skunkworks approach. This approach involves creating a small, high-performance team that works independently to develop a new product or service away from the rest of the organization. Senior project managers working on a high-stakes project in relative privacy aligns with the characteristics of the skunkworks approach.

Question 19

Which of the following is a potential benefit of forming a strategic alliance?

Accepted Answer

Forming a strategic alliance allows both firms to combine their resources and expertise, which can lead to market expansion and greater penetration of current markets. This can result in increased profits and growth opportunities for both organizations. Option A is incorrect because strategic alliances are typically formed with the intention of achieving long-term goals, not short-term operational goals. Option B is incorrect because the goal of a strategic alliance is not to give one organization a competitive advantage over the other, but rather to create mutual benefits. Option D is incorrect because there is no guarantee that forming a strategic alliance will reduce the market risk of introducing a new product.

Question 20

In _____ risk,progress goals must be established so that "proceed" or "do not proceed" decisions can be reached regarding continuation of projects.

Accepted Answer

In internal risk, progress goals are essential for making informed decisions about whether to continue or halt a project. This type of risk pertains to factors within the organization or project that could impact its success, such as resource availability, team performance, and project management effectiveness. Establishing clear progress goals allows for regular assessment of whether the project is on track and if it is still viable to proceed.

Quiz 7: New Product Planning and Development